Bitcoin Supply Analysis: Cost-Basis Bands, Miner Stress Dynamics, and ETF Flow Signals
As of the current trading period, Bitcoin is positioned outside the delineated cost-basis band of $93,000 to $110,000, a range identified by Glassnode as indicative of an “overhead supply” zone. This analytical framework shifts the focus for the forthcoming quarter away from the predetermined issuance schedule, placing greater emphasis on miner cash flow metrics and the behavioral patterns of Bitcoin holders.
According to Glassnode’s report for Week On-chain W02 2026, the Short-Term Holder (STH) cost basis is notably situated around $98,300. This threshold often serves as a critical reference point for assessing whether recent market entrants will increase their exposure or opt to distribute holdings during price rebounds.
Concurrently, the mining sector is experiencing a landscape characterized by a lean profitability regime. The Hashrate Index, in its roundup dated January 26, 2026, indicates that the six-month hashprice forward curve has stabilized at approximately $33.25 per PH/s per day (translating to roughly 0.00041 BTC), which is significantly below the breakeven threshold of $39.50 per PH/s that many miners require to sustain operations, contingent upon their specific operating costs and machinery types.
It is pertinent to note that narratives surrounding miner stress often pivot on profitability and difficulty dynamics. The persistent decline in Bitcoin’s hashrate amidst price surges suggests that miners are not incentivized to reactivate dormant machines.
This quarter introduces an additional variable: the potential influence of ETF flows as either a sink for tradable supply or a release valve into the market. Data from SoSoValue highlights a staggering $681 million in net outflows from spot Bitcoin ETFs during the first full trading week of 2026, reflecting a risk-off sentiment influenced by interest rate expectations and macroeconomic headlines. The previous week recorded net flows of -$1.3 billion—the most significant weekly outflow since May 2025.
Key Takeaways
- The issuance schedule of Bitcoin is immutable as dictated by protocol parameters, with a total supply cap of 21 million BTC and reward halvings occurring every 210,000 blocks. Immediate “supply shocks” are predominantly instigated by fluctuations in tradable float and incentivization structures, as illustrated by Blockchain.com’s supply chart.
- Glassnode identifies current overhead supply within the range of $93,000 to $110,000, with STH cost basis approximating $98,300. This range serves as a critical gauge for demand absorption throughout the quarter.
- The hashrate and difficulty adjustments have manifested under stress conditions; specifically, the seven-day simple moving average (SMA) hashrate declined from 1,003 EH/s to 966 EH/s while difficulty decreased by 3.28% to 141.67 trillion (T) on January 22, according to data from Hashrate Index.
- The hashprice forward curve indicates an average value of approximately $39.50 per PH/s per day over six months—an essential benchmark that necessitates continuous monitoring of miner treasury management and shutdown risks influenced by operational efficiency.
- The directional flow of ETFs remains a pivotal variable following such an adverse month characterized by net outflows totaling $1 billion at the commencement of this year.
Target Audience
- Long-term allocators who are closely monitoring cohort supply dynamics, cost-basis bands, and maturation trends within the market.
- Swing traders focused on analyzing STH cost basis movements and corresponding reactions within overhead supply zones.
- Institutional trading desks keeping abreast of ETF flow patterns and liquidity driven by miner activities.
- Mining and infrastructure operators engaged in managing exposure related to hashprice fluctuations along with timing adjustments in network difficulty.
Monitoring Objectives for This Quarter
- Observe price behavior surrounding the STH cost basis near $98,300 while assessing re-entry into the overhead supply band defined by $93,000–$110,000 (Glassnode W02 2026).
- Evaluate expectations for six-month hashprice recovery towards approximately $39.50/PH/s/day alongside any divergence between spot hashprice and forward curves (Hashrate Index).
- Monitor difficulty adjustment sequences following the January 22nd reduction of 3.28% to 141.67T (Hashrate Index).
- Assess venue flow dynamics; notably Glassnode’s observation regarding Binance’s shift to buy-dominant regimes while Coinbase’s selling pressure diminished (Glassnode W02 2026).
- Track weekly net flows from spot Bitcoin ETFs in light of last week’s significant outflow totaling $1.3 billion.
Issuance Fundamentals and Halving Mechanism: Fixed versus Variable Elements
The trajectory of Bitcoin’s total supply remains deterministic at the protocol level, with an absolute cap of 21 million BTC and systematic block-subsidy halvings occurring every 210,000 blocks. This constraint holds significance not only for long-term valuation assessments but also for quarterly issuance calculations.
The immediate concern for upcoming quarters centers around market-accessible supply—specifically inventory capable of reaching spot exchanges through miner sales, holder distribution activities, and ETF creation or redemption processes. It is within this context that “supply shocks” frequently arise; while issuance curves are predetermined and transparent, liquidity choices remain conditional upon prevailing market dynamics.
A majority of quarter-scale volatility can be mapped back to these liquidity decisions.
Miner Economics and Sell Pressure: The Role of Hashprice as an Immediate Supply Lever
The mining sector operates as an elastic supply lever due to miner-generated Bitcoin sales representing one of the few structural sources of recurrent distribution within the ecosystem. Such elasticity became particularly evident in late January when report data from Hashrate Index indicated a decline in the seven-day SMA hashrate from 1,003 EH/s to 966 EH/s coupled with a downward adjustment in network difficulty by 3.28% to 141.67 trillion on January 22.
The same report further indicated that forward markets are projecting constrained margins for miners moving forward.
The Hashrate Index reported that the hashprice forward curve is pricing an average value near $33.25 per PH/s per day over the forthcoming six months. Additionally, it has framed breakeven conditions for many miners at approximately $39–$40 per PH/s per day—an assessment heavily reliant on variable factors such as operational costs and hardware efficiency.
A forward-looking analysis for this quarter may be structured around three conditional pathways grounded in these data points:
- Near-Breakeven Grind: Should hashprice recover towards an implied ~$33.25 per PH/s/day level, miners operating on higher-cost fleets could face increasingly strained treasury environments. This scenario may lead to periodic declines in hashrate alongside episodic spot selling to finance ongoing operations as noted by Hashrate Index findings.
- Difficulty-Driven Relief: A further weakening in hashrate could trigger subsequent reductions in network difficulty metrics which would enhance revenue generation per unit hash even amidst stagnant BTC prices. Such adjustments could mitigate forced-selling pressures at marginal levels—illustrated by the January 22 adjustment outcome.
- Macro-Driven Compression: In scenarios where broader risk-off sentiment exerts downward pressure on BTC prices while hashprice remains near breakeven levels, accelerated shutdowns may occur among mining operations—a phenomenon that could feed back into a cycle of difficulty relief with uncertain timing implications.
The management strategies employed within miner balance sheets have significant implications for realized sell pressure over any given quarter.
This context aligns with previous narratives forecasting potential miner capitulation due to sustained declines in hashrate metrics relative to profitability thresholds.
Dynamics Between Long-Term Holders and Short-Term Holders: Understanding Overhead Supply Sources
The current analytical framework provided by Glassnode delineates overhead supply not merely as a singular price point but rather as a cost-basis band that encompasses varying market conditions. In Week On-chain W02 2026 analysis, it is noted that market dynamics are currently testing supply levels ranging approximately between $93,000 and $110,000 while situating STH cost basis at around $98,300. This framework proves crucial this quarter as it specifies potential exit points for prior buyers during rallies while simultaneously defining thresholds where new demand must effectively absorb existing inventory to avert renewed distribution pressures.
The behavioral responses among holders have exhibited signs of softening compared to late calendar year 2025 without transitioning into outright accumulation behaviors. According to Glassnode observations, Long-Term Holder (LTH) supply continues its downward trajectory albeit at a significantly reduced pace compared with distribution patterns witnessed throughout Q3 and Q4 of last year. Notably, LTH net realized profits hover around approximately 12.8k BTC weekly—substantially down from previous cyclical peaks exceeding over 100k BTC weekly.
A regime change condition identified by Glassnode conducive for fostering more sustained rally dynamics hinges upon maturation supply surpassing LTH spending patterns—thus elevating overall LTH supply levels within market structures. In quarterly contexts, clearance through overhead bands can only be achieved if selling pressure diminishes more rapidly than new demand influx occurs alongside returning participants into market activities.
An important technical caveat arises when comparing various analytical dashboards; specifically that Glassnode’s defined supply endpoints do not adhere strictly to a rigid cutoff at day ‘155’. Instead, their cohorts employ logistic weighting centered around this threshold accompanied by a transitional bandwidth spanning ten days—impacting interpretations made close to inflection points within this timeframe.
Debunking Common Myths Surrounding Bitcoin Supply Dynamics
- Myth: The halving creates immediate scarcity in tradable supply. The alterations in issuance are structured upon block-based parameters that are predefined; thus quarter-scale supply pressures tend predominantly result from miner profitability fluctuations coupled with holder distribution choices rather than automatic scarcity effects post-halving events.
- Myth: A strict boundary exists at day ‘155’ for LTH classification purposes. Glassnode’s cohort design utilizes logistic weighting centered at this day alongside transition gradients affecting interpretive outcomes particularly near critical inflection phases within market behavior analysis frameworks.
- Myth: Miner capitulation can be classified as a singular event occurrence. The dynamic interaction between hashrate reductions along with network difficulty adjustments allows for gradual normalization processes impacting profitability metrics on a unit hash basis—as evidenced through adjustments observed following declines exemplified on January twenty-second data releases from relevant indices.
Metrics Dashboard for Monitoring Key Indicators Over Six Months
| Area | Metric | Current Reference from Sources | Importance This Quarter | Source |
|---|---|---|---|---|
| Protocol | Total Supply Cap & Halving Cadence | Capped at 21M BTC with halving intervals every 210K blocks | This metric anchors issuance calculations while directing attention toward tradable float characteristics | Blockchain.com |
| Mining | 1K EH/s downwards towards ~966 EH/s (as observed late Jan ’26) | This metric serves as an indicator for assessing shutdown risks alongside revenue stressors impacting miner operations | Hashrate Index (as cited Jan ’26) | |
| Mining | Difficulty Adjustments | Declined by -3.28% bringing it downwards towards ~141.T T on Jan ’22 ’26 | This acts as mechanical relief valve assisting miner margin resilience during adverse conditions | Hashrate Index (as cited Jan ’26) |
| Mining | Hashprice Forward Curve (next six months) | Projected near ~$33.PH/day on average | Frames treasury pressure scenarios alongside probability assessments concerning forced-selling occurrences among miners | Hashrate Index (Feb ’26) |
| Holders | Overhead Supply Band | Estimated between ~$93K-$110K spans | Defines critical thresholds where preceding cost bases can translate rallies into selling flows when tested against prevailing demand levels | Glassnode W02 ’26 analysis |
| Holders | STH Cost Basis | Estimated close around ~$98.K range level established now serving confidence metric for recent entry buyers near defined overhead zones | Critical threshold serving confidence metric guiding recent buyers’ actions during upward pricing scenarios within overhead bands definition criteria under Glassnode assessments posted W02 ’26 analysis framework context reference notes provided above here .< /td > | |
